By Farrar                                       H.J.R. No. 41

      75R3283 KKA-D                           

                                 A JOINT RESOLUTION

 1-1     proposing a constitutional amendment providing for the issuance of

 1-2     general obligation bonds to finance mortgage loans for first-time

 1-3     home buyers of low or very low income.

 1-4           BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Article III, Texas Constitution, is amended by

 1-6     adding Section 49-j to read as follows:

 1-7           Sec. 49-j.  (a)  The legislature by general law may authorize

 1-8     the Texas Department of Housing and Community Affairs or its

 1-9     successor to issue and sell general obligation bonds of the state

1-10     in an amount not to exceed $100 million.  The bonds shall be called

1-11     "Texas Housing Bonds" and shall be issued and sold in forms and

1-12     denominations, on terms, at times, in the manner, at places, and in

1-13     installments the department or its successor determines, except

1-14     that the total amount of bonds issued in a state fiscal year may

1-15     not exceed $50 million.  The bonds shall bear a rate or rates of

1-16     interest the department or its successor determines, except that

1-17     the legislature by general law shall set the maximum net effective

1-18     interest rate to be borne by the bonds.

1-19           (b)  The legislature by general law may authorize the Texas

1-20     Department of Housing and Community Affairs or its successor to

1-21     enter into bond enhancement agreements to place the obligation

1-22     represented by the bonds, in whole or in part, on an interest rate,

1-23     currency, cash flow, or other basis the department or its successor

1-24     determines.  The obligation of the department or its successor

 2-1     under the agreements to make payments with respect to principal of

 2-2     or interest on the bonds shall also constitute a general obligation

 2-3     of the state.

 2-4           (c)  The bonds and the bond enhancement agreements with

 2-5     respect to the bonds are incontestable after execution by the Texas

 2-6     Department of Housing and Community Affairs or its successor and

 2-7     approval by the attorney general.

 2-8           (d)  All money received from the sale of the bonds shall be

 2-9     deposited outside the treasury with the Texas Treasury Safekeeping

2-10     Trust Company and administered by the Texas Department of Housing

2-11     and Community Affairs or its successor to finance mortgage loans

2-12     for the purchase of homes in this state by persons of low or very

2-13     low income who have not previously owned a home.  A portion of the

2-14     money may be used to pay costs associated with issuing the bonds

2-15     and administering the mortgage loans.

2-16           (e)  While any of the bonds or interest on the bonds is

2-17     outstanding and unpaid, there is appropriated out of the first

2-18     money coming into the treasury in each fiscal year, not otherwise

2-19     appropriated by this constitution, the amount sufficient to pay the

2-20     principal of and interest on the bonds that mature or become due

2-21     during the fiscal year, including payments made during the fiscal

2-22     year by the Texas Department of Housing and Community Affairs or

2-23     its successor under bond enhancement agreements with respect to

2-24     principal of or interest on the bonds.

2-25           SECTION 2.  This proposed constitutional amendment shall be

2-26     submitted to the voters at an election to be held November 4, 1997.

2-27     The ballot shall be printed to permit voting for or against the

 3-1     proposition:  "The constitutional amendment authorizing issuance of

 3-2     $100 million in general obligation bonds to finance mortgage loans

 3-3     for the purchase of homes by certain persons of low or very low

 3-4     income."